Antifragile: How to Live in a World We Don’t Understand | Nassim Nicholas Taleb
If you can’t beat them, join them
In a canny bit of advice to his readers in an early chapter of Antifragile: How to Live in a World We Don’t Understand, Nassim Nicholas Taleb gamely tells us: “So if you really want people to read a book, tell them it is ‘overrated,’ with a sense of outrage (and use the attribute ‘underrated’ for the opposite effect).” I am sorry to disappoint, for I shall apply neither moniker to this weighty new tome.
The third in a trilogy preceded by Fooled by Randomness: The Hidden Role of Chance in Life And in the Markets (2001) and The Black Swan: The Impact of the Highly Improbable (2007), Taleb’s latest is his most ambitious, by his own say-so. Never a writer to be accused of false modesty, he announces in the prologue that this, indeed, is his “central” work, taking his “one master idea” to what one presumes to be its logical conclusion.
The third instalment of trilogies are notoriously problematic (one need think only of the disastrous final film of the original Star Wars saga), but in this claim Taleb may be said to be on a safe wicket.
The disarmingly simple, yet profound, idea that has animated Taleb’s thinking is that the world is fundamentally random and, therefore, unpredictable. The corollary is that since human beings crave order, we, as a consequence, create mental and other constructs that give our chaotic universe a false, and ultimately dangerous, appearance of order where in fact there is none. The financial crisis in which the world is still plunged is a favourite and recurring example of the hubris of those who claim to understand the functioning of the global economy, only to have the works literally blow up in their faces.
One important way in which we construct the fiction of order is to “explain” a random sequence of unrelated events by creating a narrative around them and imputing causal connections where none exist. The result is an ex-post-facto rationalization which gives us psychological comfort but seriously misleads. Taleb aptly dubs this the “narrative fallacy”.
The insight that we are “fooled by randomness” is powerful indeed; one measure of its potency is that it may fruitfully be applied in areas far removed from the examples purveyed by Taleb.
While his earlier works explored the nature of randomness, the final panel of Taleb’s triptych is consumed less with philosophical and quasi-philosophical maundering, although there is a fair bit of that too. Rather, he is here concerned with the more practical matter of how we ought to react.
As Taleb himself is fond of aphorism and folk wisdom, one might summarize his proposed answer with the well-known quip: “If you can’t beat them, join them.” Rather than resist a volatile and unpredictable world, which is futile, what we should do, he suggests, is design our lives, our institutions, and our modes of thought to benefit from randomness, rather than to be harmed by it, or even to be impervious to it (the world of finance, from which he hails, again furnishes Taleb’s most potent examples).
In this suggestion lies the rationale for the inelegant but succinct neologism that gives this book its title. The “antifragile” is not merely robust to potentially harmful shocks; it actually benefits from them.
The central section, which Taleb invites “nontechnical” readers to skip, consists of the formalization of the thesis in the rigorous language of mathematics and statistics. The core of the idea, known to mathematicians as “Jensen’s inequality”, will actually be familiar to anyone who has taken an undergraduate course in microeconomics or statistics: convex functions “like” uncertainty, and so are antifragile, whereas concave functions “dislike” uncertainty, and so are fragile (in keeping with his trademark brand of cracker-barrel humour, Taleb illustrates the appearance of convex and concave functions with smiling and sad faces, respectively).
Some of Taleb’s examples of the antifragile work rather well. The concept of “hormesis” in pharmacology, whereby a small dose of a poisonous substance is administered and actually makes a patient stronger, is especially condign.
But some examples have perfectly acceptable conventional explanations that do not require invoking an exotic new concept. For instance, the book reports a finding by the US airline regulator suggesting that increased automation in the cockpit makes pilots complacent and thus increases, rather than decreases, the possibility of accidents.
Yet this is a perfectly standard application of what economists call the “offsetting effect”, so coined by Sam Peltzman, who discovered three decades ago that seat-belt laws and automobile safety equipment had no effect on reducing fatalities caused by automobile accidents and for the identical reason: Safer cars make drivers more rash.
A deeper objection that Taleb grazes but does not quite convincingly answer is that his notion of “antifragility” could be subsumed under the evolutionary biologists’ conception of the fitness-maximizing gene—what Richard Dawkins has popularized as the theory of the “selfish gene”, or what we more commonly call “survival of the fittest”. If Taleb is correct that antifragile organisms are more likely to survive than fragile or even merely robust ones, the conclusion seems self-evident.
At one point Taleb helpfully observes that the 7 hours or so that it takes to fly from New York to London afford the traveller ample time to read a short book, converse politely with a neighbour for a few minutes, and enjoy a dinner with crackers, Stilton cheese and port wine. While I have no quarrel with his taste for the finer things in life, Taleb evidently could not have been thinking of his own book, which, weighing in at a hefty 500 or so pages, will take the conscientious reader considerably longer to digest.
Vivek Dehejia is an economics professor at Carleton University in Ottawa, Canada, and co-author of Indianomix: Making Sense of Modern India.